The three companies - who grew their smartphone shipments around two times faster than the global industry average - held a combined market share of 14 percent last year, according to data from Strategy Analytics . This compared with Apple's 15.5 percent market share, which fell from 19.4 percent in 2012.
"There is clearly now more competition coming from the second-tier smartphone brand. Huawei is expanding swiftly in Europe, while LG's Optimus range is proving popular in Latin America, and Lenovo's Android models are selling at competitive price-points across China," Linda Sui, senior analyst at Strategy Analytics wrote in a report on Monday.
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"Large marketing budgets, extensive distribution channels and attractive product portfolios have enabled Samsung and Apple to maintain their grip on the smartphone industry. (They) will need to fight hard to hold off these and other hungry challengers during 2014," she added.
Samsung, meanwhile, maintained its strong grip on the smartphone segment despite growing competition from Asian and American players.
With its successful models such as the Galaxy S4 and Note 3, the South Korean giant widened its lead over Apple, growing its smartphone market share to 32.2 percent in 2013, from 30.4 percent in 2012.
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In fact, the Samsung shipped a record 319.8 million smartphones worldwide in 2013 - the largest number of units ever shipped by a smartphone vendor in a single year.
This is in a contrast to Apple whose market share is shrinking in part due to its lack of presence in the low-end segment, which is fast-growing in emerging markets, said Strategy Analytics.
"Apple remains strong in the high-end smartphone segment, but a lack of presence in the low-end category is costing it lost volumes in fast-growing emerging markets such as India," Neil Mawston, executive director at Strategy Analytics said.
Global smartphone shipment milestone
Booming demand for low-cost devices boosted global smartphone shipments to a record high in 2013, according to Strategy Analytics and International Data Corporation (IDC).
Strategy Analytics estimates that global smartphone shipments reached a record 990 million units last year, from 700.1 million in 2012. Meanwhile, IDC says vendors shipped a total of 1,004.2 million units, up from 725.3 million in the previous year.
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"Among the top trends driving smartphone growth are large screen devices and low cost," said Ryan Reith, program director, IDC's Worldwide Quarterly Mobile Phone Tracker.
"Of the two, I have to say that low cost is the key difference maker…this is the portion of the market that is driving volume. Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many," Reith said.
—By CNBC's Ansuya Harjani. Follow her on Twitter: @Ansuya_H